At a recent personal injury/disability management conference, a panel moderator told delegates, “The topics on our agenda today are strikingly similar to those on the conference agenda from a decade ago” (Rebecca Harris, GM Regulatory Services WorkCover WA at PIEF Conference, Perth: October 2024 [paraphrased]).
Her statement resonated with my own experience attending
workers’ compensation conferences in each of the past five decades. Many of the issues facing workers’
compensation systems are perennial; the relative priority and details change
with the times, but the themes are enduring.
The lead agenda items from the 1954 International
Association of Industrial Accident Boards and Commissions (IAIABC) Conference
70 years could appear on any workers’ compensation conference held today:
- Rehabilitation of Injured Workers
- Problems and Methods of Handling Small Risks and Excluded Employees Who May Want Voluntary Coverage
- Adequacy of Workmen's Compensation
- Occupational Cancer Hazards
The keynote speaker at the 1954 IAIABC conference in Quebec
was the then Under Secretary of the U. S. Department of Labor, Arthur Larson. The conference was themed around “Workmen’s
Compensation Problems” and Larson’s keynote was entitled “The Future of
Workmen’s Compensation”.
Larson had recently completed his master work on workers’
compensation law (Larson, A. (1952) Workmen’s compensation law. Matthew
Bender) and was concerned about the deficiencies and inconsistencies in the
current (1954) state of workers’ compensation.
Many of those concerns align with issues facing workers’ compensation in
2025.
Inconsistent Benefits Across Jurisdictions.
Variations in coverage across states and provinces were “a
grave and growing concern” for Larson.
The variation in the compensation rate for temporary disability, the
absence of full indexing of permanent benefits, and uneven compensation for
fatalities are contemporary issues in today’s workers compensation landscape. Larson was aware of the legislative
differences among US states and Canadian provinces (acknowledging greater
consistency in Canada) and some of these differences were highlighted in his
speech.
Coverage Gaps
Larson noted, “Elective-coverage provisions, and
hazardous-employment requirements, inspired by ancient fears of
unconstitutionality, have long since been proved unnecessary… but remain with
us to deprive large numbers of people of needed protection.” His comments were focused on agriculture,
small business workers, and many occupational diseases not covered. Gaps in
coverage continue to exist. In Canada,
where half the jurisdictions cover well over 90% of the employed labour force,
six jurisdictions cover a far lower percentage (ranging from about 70 to 80%)
of the employed labour force. In the US, there are gaps in coverage for gig
workers, independent contractors, and remote workers face uncertainty in
coverage.
Inadequate Benefits & Duration
Larson was very concerned about equity. He states, “A system which has been assigned
the function of taking care of income loss due to industrial disability has no
right to stop payments to a totally permanently disabled man after 8 or 10 or
15 years.” Today, the growing
participation rate of older workers and increased longevity accentuate the
inequity of age-limited compensation; compensation for catastrophic injures is
inadequate in many jurisdictions.
Although all but one Canadian province has eliminated waiting periods
and most provide wage replacement at 85-90% of net (spendable) earnings, many US
jurisdictions limit benefits through maximums on payments or insured earnings
forcing workers to bear much more of the financial loss than the grand bargain
of workers’ compensation was supposed to provide.
Medical & Rehabilitation Challenges
In Larson’s 1950’s context, there was a burgeoning of
medical and rehabilitation knowledge. “Entire
new worlds of knowledge have been opened up on such matters as physical and
vocational rehabilitation, and medical techniques for minimizing the disabling
effects of injury, with relatively little parallel development of compensation
law.” His concerns are echoed today
where many jurisdictions provide little or no access to vocational
rehabilitation. Critics often complain
about the lag in workers’ compensation recognizing certain medical treatments
including the use of medical marijuana and psycho active drugs; rules regarding
treatment and care particularly for mental injuries and limits on graduated
return-to-work initiatives often seem arbitrary and inconsistent with the
nature of mental injuries in particular.
Externalization of costs
Larson emphasizes the need for workers’ compensation to pay
for the costs of work-related injury, disease and death. He opposes externalization
to public assistance or other social insurance.
This also speaks to the adequacy and sufficiency of the benefit levels
paid to workers. Larson was clear, “The products of this area are sold all over
the world ; the cost of workmen's compensation goes into the price of these
products and is borne by consumers everywhere; yet the voters and property
owners of that city and State go on bearing the cost of public relief in the
form of local taxes for a burden that is supposed to be borne by the consumers
of the product.”
Federalization versus State/Provincial Control
Larson believed workers’ compensation was best administered
at the state level. He noted Canadian provinces were strongly oriented in this
fashion. State/provincial control of
workers’ compensation is not universal; the US, Canada, and Australia are the
exceptions to the general rule of national programs. Larson cited from his previous speech in
Boston on the same topic:
"We should adhere to State responsibility for the
system, and not succumb to the temptation of federalization… I believe that
workmen's compensation should remain a State matter”
Larson decried the disparities
among jurisdictions, particularly those providing the least coverage. There
have been efforts at harmonizing compensation or establishing national standards (see John F.
Burton’s 1972 Report of the National Commission on State Workmen’s Compensation
Laws), but as I have shown in previous posts, few US jurisdictions meet or
exceed its recommended levels of compensation.
Other comparative studies of workers’ compensation laws report the
differences and make disparities quite apparent, but don’t set standards (see
tables at AWCBC.org, Comparison of Workers’
Compensation Arrangements in Australia and New Zealand 2023, NASI’s Workers’ Compensation Benefits,
Costs and Coverage – based on 2022 data, particularly Appendix D, which summarizes
IAIABC/WCRI’s report on State Workers’ Compensation Laws).
Extraterritorial & Jurisdictional Issues
As Larson put it, “Interstate operations, in
transportation, construction, selling, and the like have increased greatly,
while compensation provisions on extraterritorial coverage and jurisdiction
remain as chaotic and jumbled as ever.”
With remote workers, mobile workers, and now digital nomads working from
remote cabins, cruise ships, and caravans through satellite access, the concept
of the “workplace” has changed dramatically.
More workers travel across jurisdictional lines from home to work, and
some have multiple jobs in two or more jurisdictions. Questions regarding jurisdictional issues
remain with many concerns over workers falling through the cracks in coverage
or being overwhelmed by the jurisdictional requirements. Many are forced to elect the jurisdiction to consider
their options and complete forms at a time when they simply need treatment and
funding to survive. While there are some
inter-jurisdictional agreements (see AWCBC-IJA as an example), there are still
gaps including those digital nomads, remote workers working outside of or
across multiple jurisdictions.
The Role of Public Assistance & Safety Nets
“Workmen’s compensation was supposed to make public
assistance unnecessary; but in some areas a considerable fraction of
compensation recipients are driven to seek public assistance to bring their
benefits up to a subsistence level.”
Larson saw the policy ideal but recognized compensation levels were
often inadequate. The consequences
include inconsistent rules regarding access to other social insurance schemes,
reduced benefits and offsets as well as confusing differences across
jurisdictions remain.
Workplace Safety & Emerging Risks
Larson’s speech predate OSHA’s formation in 1971 so his
focus was more on the insurance side of workers’ compensation. He certainly was aware of workplace safety
and the need to identify emerging risks.
“New diseases and new hazards have come with new industries and
processes,” said Larson, noting that legislation makes little or no provisions
for quick adaptations and inclusions, noting only “piecemeal amendments and
sporadic revisions”. Transportation
network “gig” workers did not exist in the past and we are in the midst of
deciding jurisdiction by jurisdiction whether the workers in this industry will
be in or out of coverage. Occupational
disease coverage remains a contentious issue with uneven coverage, especially
for conditions like PTSD and long-latency illnesses (e.g., cancer, long COVID).
Larson would recognize the challenge Covid-19 created for workers’ compensation
systems; whether he judge the response in terms of new presumptions a
consistent response is open to debate.
Purposeful Leadership and Focus
Larson sought to inspire the leadership of workers’
compensation systems present at the Quebec conference. He understood the need for greater
understanding in the broader community about the purpose of workers
compensation. “I would like to see the name of the whole system changed from
Workmen's Compensation to Workmen's Restoration …. The purpose would be to
dramatize the fact that the system no longer should be satisfied to
"compensate" in the sense of paying off or buying off the injury; it
should now recognize an obligation to make the injured workman whole, to
restore him to health and useful employment, through careful medical attention,
and through systematic physical and vocational rehabilitation.”
While no system has adopted Larson’s proposal, many have
renamed their systems or significant programs under their legislative mandate
to align with his intent, shifting the focus away from compensation and towards
prevention and return to work. The
“WorkSafe” moniker (emphasising these authorities’ roles in occupational health
and safety both in primary prevention and safe return to work) has been adopted
in British Columbia and New Brunswick in Canada, Victoria and Tasmania in
Australia, and by some specific programs run by or with the workers’
compensation programs in Montana and Saskatchewan. South Australia’s WorkCover
corporation rebranded in 2015 as ReturnToWorkSouthAustralia. [Larson would
likely approve].
Recurring themes
At that recent PIEF conference, Rebecca Harris moderated a
“Leadership Perspective” panel. The
discussion included the need for “purposeful leadership” and the need to engage
stakeholders, increasing their understanding of workers’ compensation and the
issues we collectively face, and the need moral authority/ social capital to
operate in the workers’ compensation space. I’m certain anyone in workers’ compensation
would recognize echoes from the themes in Larson’s 1954 speech.
The full text of Larson’s address is contained in “Workmen's Compensation Problems, 1954:
Proceedings--40th Annual Convention of the International Association of
Industrial Accident Boards and Commissions, Quebec, Canada, October 3-7, 1954,
Issue 180” on Google Books. I could not locate an actual recording of Larson’s
address, but I have linked an AI
synthesized [Speechify] audio version of Arthur Anderson’s 1954 IAIABC Address-
The Future of Workmen’s Compensation.
